Two developments in the 11th century prove of lasting benefit to Venice, which is by now the leading maritime power in the Adriatic. The first is the appearance of a rival in Italian waters. The Normans drive the Byzantines from their last seaport in southern Italy by 1071, and soon they begin raiding across the Adriatic; in 1082 they take the important harbour of Durrës (or Durazzo) in Albania.

In return for help against these marauders, the Byzantine emperor grants Venice an astonishing concession. Venetians may henceforth trade freely throughout the Byzantine empire, without being liable for any dues or customs.

The other new development of the late 11th century opens up extra routes for trade, along the coasts of the Byzantine empire and beyond. In 1096 the contingents of the First Crusade set off eastwards to recover the holy places of Christendom from the Muslims. They are in Syria by 1098. By the end of 1099 there is a Latin kingdom of Jerusalem.

A great increase in trade, travel and pilgrimage to the eastern Mediterranean is the inevitable result. Venice, which has the skills to provide the transport and an already established trade concession, is once again perfectly placed. But it soon meets strong rivalry from two other great maritime communes, Genoa and Pisa.

The Italian communes of the west coast demonstrate their strength in the 11th century when Genoan and Pisan fleets, often working in alliance, protect Corsica and Sardinia from the depredations of Muslims. Both cities subsequently develop extensive trade in the western Mediterranean. Genoa also plays a large part in the crusades, establishing strong trading links in the eastern Mediterranean and coming into direct competition with Venice.

Warfare between these two Italian city states is long and intermittent, with Venice by no means always the stronger - until the issue is finally resolved in 1380 at Chioggia.

Venetian mosaics: 12th - 13th century

Venice's long link with Constantinople is evident in the mosaics, in the Byzantine style, for which the islands of the lagoon are famous. The earliest are on Torcello, the first centre of the Venetian state, where the cathedral apse contains a superb 13th-century image of the Virgin and Child.

The entire west wall of the cathedral is occupied by a vast mosaic of the same period depicting the Last Judgement. The subject is more characteristic of the western church than of Byzantium, as is the somewhat radical manner in which figures of authority are prominently displayed among the damned - including the Byzantine emperor, the Venetian doge and the German emperor.

When the Torcello mosaics are being installed, this cathedral is no longer the most important one in the Venetian lagoon. That honour has passed to St Mark's, where craftsmen in mosaic are busy at the same period. Their labours produce probably the most sumptuous church interior in the world, with every corner a sombre glittering gold. It has been calculated that the mosaics of St Mark's cover an area of about an acre.

Dating mainly from the 12th and 13th centuries, these Italian mosaics represent the culmination of a great Byzantine tradition. But at the end of the 13th century Italy also provides a new beginning in an equally great theme in the history of art - that of the European fresco.

The Pala d'Oro: 10th - 14th century

In addition to its Byzantine mosaics, St Mark's contains in the Pala d'Oro the most spectacular surviving altarpiece of a kind familiar in imperial Byzantine churches. Small scenes in cloisonné enamel of Jesus, the Virgin and saints are set in a gold background encrusted with jewels. Commissioned from the workshops of Constantinople by a doge of the 10th century, the original Pala d'Oro is dismantled and extended several times to incorporate new panels. It acquires its present form in 1345.

Some of the added panels are brought here from Constantinople in 1204, among the loot which greatly enriches Venice as a result of the shameful episode of the fourth crusade.

Venice as a commune: 12th - 18th century

From the circumstances of its foundation, Venice has been from the start unique - a small self-governing community of refugees which grows rich on its own audacious merits. But in the 12th century other north Italian cities adopt a communal form of government, similar to what Venice has always had.

Venice, at the same period, takes steps to preserve its republican identity. Reforms are put in place to ensure that the position of the doge (who holds office, like the pope, until death) cannot evolve into that of a hereditary signore - as will subsequently happen in other Italian communes.

In various stages between 1140 and 1160 the government of Venice (which now includes Venetian colonies along the Dalmatian coast) is removed from the sole personal responsibility of the doge and is transferred to powerful councils. The supreme body is the Great Council of 45 members, with ultimate responsibility for state affairs. On day-to-day matters an executive Minor Council of six members is appointed to guide the doge.

Over the years Venice's councils grow and proliferate.

During the 13th century the Great Council expands from 45 members to 60 and then 100. A new Council of Forty is added at some time before 1223, followed by another body of 60 members with special responsibility for financial affairs; this is the Consiglio dei Rogati, known also as the Senate. A Council of Ten is added in 1310, to check on everybody else.

The doge, richly attired and publicly honoured, is a powerless figurehead at the centre of this state administration. The system is brilliantly devised to preserve the status quo in two ways - preventing the present doge's family from acquiring power and preventing the wider group of patrician families from losing it.

The doge is not allowed to engage in trade or any financial activity. No member of his family may hold office in government or serve on the councils. Safeguards are in place to prevent an election being rigged (the final group of electors is chosen by lot). Thus the graft and nepotism which disfigures the papacy is ruled out for the doges of Venice.

Similarly stringent measures are introduced to prevent outsiders getting in. Between 1290 and 1300 the so-called 'closing of the Great Council' limits membership to those families which have provided members in the past. Oligarchy is thus enshrined, in a system which survives until the French Revolution. Rarely has power been so successfully ring-fenced for so long.

Venice and Constantinople: 1082-1201

During the 12th century Venetian merchants make excellent use of the exclusive trading privilege granted them in the Byzantine empire, in 1082, for their help against the Normans. But their wealth and arrogance provoke profound hostility in Constantinople.

In an attempt to curb them, the emperor makes trading agreements with Genoa in 1169 and with Pisa in 1170, following this in 1171 with the confiscation of the goods of every Venetian merchant in the empire. In 1182 the people of Constantinople take matters into their own hands with a massacre of the Latins (or Roman Catholics) living in the city.

Dynastic conflicts in the last years of the 12th century compound the troubles of the Byzantine empire, and accidentally play into the hands of Venice. In 1195 the emperor Isaac II is deposed and blinded by his brother. Isaac's son, Alexius, is imprisoned. In 1201 he escapes and makes his way to western Europe to seek assistance in the recovery of his throne.

In the same year arrangements are being made in Europe for yet another crusade, the fourth, to the Middle East. This time it is proposed that the crusaders depart in a great fleet from Venice. The Venetians, masters of secret diplomacy, suddenly have all the necessary threads in their hands. They weave them into an intricate and profitable web of deceit.

The fourth crusade: 1202-1204

Inspired by the pope's preachers to set off for the east, a new wave of crusaders makes travel arrangements in Venice in 1201. Their immediate target is Egypt, now thought to be the most vulnerable part of Saladin's empire in the eastern Mediterranean.

Venice drives a hard bargain. The city will provide ships for 4500 knights and their horses, 9000 squires to serve them and 20,000 foot soldiers; food for a year for the entire expedition; and fifty galleys as an escort. For this the crusaders will pay 85,000 silver marks and will cede to Venice half of any lands they conquer. This is agreed, with a departure date planned for some time after June 1202.

Venetian diplomats immediately get in touch with the sultan in Egypt, with whom they have excellent trading agreements, to assure him secretly that Venice will not allow the crusading fleet to reach his shores. Behind the scenes the doge is also negotiating with agents of Alexius, son of the deposed emperor in Constantinople. It seems possible that the crusaders might be diverted to this rich and ancient city, where Venice by now has several grudges to settle.

Soon the hard facts of commerce are playing into Venetian hands. The crusading army is assembled in Venice by the summer of 1202. But it has nowhere near assembled the agreed sum of 85,000 silver marks.

The Venetians propose a compromise. They will accept deferred payment and yet honour their side of the bargain, if the crusading army will do them a small favour on the journey out to Egypt. Venice has for a while been disputing control of Dalmatia with the king of Hungary. The Hungarians have recently seized an important coastal city, Zara (now Zadar). It would be a fine thing if the crusaders would recover this city.

The crusaders sail from Venice on November 8 and arrive at Zara on November 10. They besiege the city for five days and pillage it for three. It is then decided that it is too late in the year to continue eastwards. They make a winter camp.

During the winter the Venetians agree terms with Alexius. If placed on the throne in Constantinople, he will pay Venice the sum owed by the crusaders. He will also provide funds and men to help the crusade on its way.

The proposal is put to the crusading army and with some reluctance is accepted. The fleet reaches Constantinople in June 1203. The crusaders break through the great chain protecting the harbour and breach the city walls in July. On August 1, in Santa Sophia, Alexius is crowned co-emperor - alongside his blind father. With the immediate purpose achieved, the crusade should be able to continue on its way. But now it is Alexius who cannot deliver his side of the bargain.

The sack of Constantinople: 1204

The crusaders camp outside Constantinople while Alexius, as emperor, tries to raise his debt to the Venetians by taxing the citizens and confiscating church property. For nine months growing resentment within the city is matched by increasing impatience outside. In April the Venetians persuade the crusaders to storm Constantinople and place a Latin emperor on the throne. For the second time they succeed in breaching the walls.

The doge of Venice and the leading crusaders instal themselves in the royal palace. The army is granted three days in which to pillage the city.

The Venetians, from their long links with Constantinople, can appreciate the treasures of Byzantium. They loot rather than destroy. St Mark's in Venice is graced today by many rich possessions brought back in 1204 - parts of the Pala d'Oro, the porphyry figures known as the tetrarchs, and above all the four great bronze horses.

The crusaders, mainly French and Flemish, are less refined in their tastes. They tend to smash what they find. They ride their horses into Santa Sophia, tear down its silken hangings, destroy the icons in the silver iconostasis. A prostitute, placed on the patriarch's throne, obligingly sings a bawdy song in Norman French.